Australian businesses, farmers, and community organisations are set to benefit from a significant expansion of the federal Small-scale Renewable Energy Scheme (SRES), with solar photovoltaic (PV) systems up to 1 megawatt (MW) becoming eligible for Small-scale Technology Certificates (STCs) from October 1, 2026. This policy change, confirmed by the Clean Energy Regulator (CER) on September 18, 2026, aims to drastically reduce the upfront cost of mid-scale solar installations across the country.
Previously, SRES eligibility for solar PV systems was capped at 100 kilowatts (kW). The tenfold increase to 1 MW is expected to unlock substantial financial incentives, potentially cutting upfront installation costs by approximately 20% for larger commercial systems. For example, a 250 kW system could see reductions of around $68,000.
Driving Commercial Solar Uptake
The expansion of SRES to include systems up to 1 MW is a direct response to the growing demand from commercial, industrial, and agricultural sectors for larger solar installations. These sectors often have significant energy demands and ample roof space or land suitable for systems larger than 100 kW, but previously missed out on the same level of federal support available to smaller residential and small business systems. The CER expects this change to “support increased investment across the commercial, industrial and agricultural sectors, alongside a request to the Australian Energy Market Commission (AEMC) to consider rule changes that could streamline grid connection processes for mid-scale systems.”
“Expanding the Small-scale Renewable Energy Scheme, expected from October, will help businesses, farmers and community organisations install mid-scale solar and reduce their energy costs.” — CER spokesperson, September 2026.
STCs are a key component of Australia’s renewable energy policy, designed to reduce the upfront capital outlay for eligible renewable energy systems. Each STC represents one megawatt-hour (MWh) of renewable electricity generated, stored, or displaced by an eligible system. By expanding eligibility, the federal government is effectively making larger commercial solar projects more financially viable from day one.
How the Expanded STC Scheme Works
Under the SRES, when an eligible solar PV system is installed, a certain number of STCs are created. These certificates can then be sold to liable entities (generally electricity retailers) to help them meet their renewable energy obligations. Most commonly, installers facilitate this process, offering an upfront discount on the system’s cost in exchange for the right to create and sell the STCs.
For systems under 100 kW, STCs currently offer an indicative discount of $200–$300 per kW. While the exact value for systems between 100 kW and 1 MW will depend on various factors, including geographical location (STC zones), installation date, and the prevailing STC market price, the overall impact is a substantial reduction in the initial investment.
Key Details for Businesses:
| Feature | Previous Eligibility (PV) | New Eligibility (PV, from Oct 1, 2026) |
|---|---|---|
| Maximum System Size | 100 kW | 1 MW |
| Incentive Mechanism | Small-scale Technology Certificates (STCs) | Small-scale Technology Certificates (STCs) |
| Primary Beneficiaries | Households, small businesses | Businesses, commercial, industrial, agriculture, community organisations |
| Application Process | Handled by accredited installer as upfront discount | Handled by accredited installer as upfront discount |
Applications for systems under the expanded eligibility are expected to open in mid to late November 2026, once the necessary systems and processes are in place. Projects installed from October 1, 2026, will be eligible.
Broader Impact on Australia’s Energy Transition
This policy adjustment comes as Australia continues its rapid energy transition. The Clean Energy Regulator’s latest Quarterly Carbon Market Report for Q2 2026 highlighted record uptake in rooftop solar installations, household battery storage, and large-scale solar investment. Expanding SRES to mid-scale commercial solar will further accelerate this trend, helping businesses reduce operational costs and contribute to national emissions reduction targets.
Businesses considering solar can use this expanded federal support alongside other state-based incentives where applicable. For example, New South Wales has introduced new commercial battery incentives (BESS4 and BESS5) from September 1, 2026, offering discounts of 20-40% on eligible battery installations for businesses between 20 kWh and 30 MWh. While the federal STC scheme for PV and the NSW battery incentives are separate, they collectively create a more attractive landscape for businesses to invest in renewable energy solutions.
Understanding the various incentives available, including federal STCs and potential state-specific programs, is crucial for maximising savings. Businesses should consult with accredited solar installers to determine their eligibility and calculate the precise financial benefits for their specific project. For a comprehensive overview of available support, readers can refer to our Your 2026 Guide: Claim Up To $15,000 in Energy Rebates Across Australia.
This move also aligns with the broader goal of making renewable energy more competitive. While module prices continue to fall, balance-of-system costs (labour, civil works, grid connection) have remained a significant component of total project costs for utility-scale solar. Initiatives like the SRES expansion help address these financial barriers at the mid-scale level. For businesses looking to optimise their solar investment through panel selection, our guide on N-Type vs. P-Type Solar Panels in Australia 2026: Unlock $1,000+ Extra Savings Annually offers valuable insights.
The federal government’s commitment to supporting mid-scale solar through the SRES expansion signals a strong push towards decentralised energy generation, empowering more Australian businesses to take control of their energy costs and transition to cleaner power. This will not only reduce individual business expenses but also bolster grid stability and contribute to Australia’s renewable energy targets.
What This Means for Your Business
For businesses planning a solar installation between 100 kW and 1 MW, the upcoming changes represent a substantial opportunity for cost reduction. Engaging with a Clean Energy Council accredited installer is the first step to understanding the specific savings applicable to your project and navigating the application process for STCs. The increased financial viability is expected to drive a new wave of commercial and industrial solar adoption from October 2026, contributing significantly to Australia’s renewable energy future.